Do entrepreneurs learn from their experiences?
Originally posted on The Horizons Tracker.
The entrepreneurial learning curve is often an extremely steep one, with entrepreneurs picking up the tools of the trade at a rapid pace as they try to grow their businesses. Research1 from Harvard Business School shows, however, that the learning curve may not be quick enough.
Indeed, the study suggests that in new startups, the second product launched by the business is usually six weeks later than planned, with these delays lengthening for each subsequent product.
The pivot has become a crucial weapon in the entrepreneur’s armory in recent years, with the speed of learning from one’s experiences a key aspect of pivoting well. The delayed product launches don’t appear to suggest that learning is happening in many startups today.
Instead, the findings suggest that founders are often blind to the various issues that could delay or hinder a product launch, even after experiencing one for the first time. This can be especially problematic as one could reasonably expect the second product launch to build on the lessons learned from the first one, often incorporating crucial feedback from the market.
The researchers tracked over 300 entrepreneurs as they launched over 700 technology hardware projects on Kickstarter between 2010 and 2019. Alongside customer feedback for each project, the researchers collected data on the number of features the product had and the delivery times for the product. They also monitored the track record of the entrepreneurs via Crunchbase.
Worryingly, some 76% of the projects missed their initial deadline. In follow-up interviews, it emerged that the entrepreneurs were often unable to foresee the problems the product launches would encounter. Indeed, they often lacked a true appreciation of the steps involved in getting the product made in the first place.
Interestingly, the entrepreneurs often seemed more concerned with getting the product just right than releasing it on time. That again seems to go against the Zeitgeist of releasing things quickly and then modifying it rapidly based on feedback from users, although you suspect that much of this advice is predicated on the product being software-based, and therefore easier to modify than a hardware-based product.
The researchers hope that their findings might help to guide both entrepreneurs and the incubators, VCs, and accelerators that so often strive to support them in identifying the blind spots that can hinder growth.
“As you add new features to your next product, you need to do more than just linearly add time to your original timeline,” the researchers say. “It’s going to vary project by project, and it’s hard to say if that’s 2x, or 3x, or 4x. But that is the right ballpark you should be thinking of as you plan your next timeline. As you do projects over time, you should gain some sense of how fast the complexity is increasing. Pad your timelines aggressively to account for the larger number of things that are going to go wrong.”
Article source: Do Entrepreneurs Learn From Their Experiences?
Header image source: Priscilla Du Preez on Unsplash.
- Peterson, A., & Wu, A. (2021). Entrepreneurial learning and strategic foresight. Strategic Management Journal, 42(13), 2357-2388. ↩